The market has a tendency to expect the everything in less than seven days. It wants systemic change, and it wants it now. The psychology is in part due the quarterly earnings system, which has given us a reason to expect noticeable change every three months, even for companies that been around for a century. For years, investors have called for a remodeling of former search giant Yahoo! (NAS: YHOO) . The plea went unheard for a while, with lousy efforts and minimal tweaks. But when Marissa Mayer came in earlier this year, it was clear this was an answer to investors' prayers. Though she has only been in the C-suite 100 days, Mayer has taken steps to create a better, more forward-thinking Yahoo!.

Speaking of quarters
Real change takes time. I think we all know that, even if the market is a bit behind. For major turnaround stories, it can take years to realize initiatives announced today. Investors and analysts typically have little to no patience for this fact of life, and the stocks get punished all the way through. But Yahoo! has actually dodged this bullet by posting a very encouraging third quarter, even though the biggest reorganization ever for the company is only a few months old.

For the third quarter of 2011, the company posted a dismal $293 million in net income. A year later, that number is $3.16 billion. Now, it wasn't a case of supernatural growth for the $20 billion company as much as the sale of its Alibaba stake. Investors bemoaned Mayer's decision to give back the company's 50% stake in Alibaba, best exemplified by famed hedge fund manager David Einhorn dumping his firm's relatively large position in the Yahoo!. I'm sure Einhorn had very good reasons for doing so, but the Alibaba sale made sense given Mayer's commitment to bringing Yahoo! back to a user experience-focused search company. Whatever your position on the sale, it brought in $7.3 billion pre-tax for Yahoo!, the majority of which the company plans to give back to shareholders.


Top and bottom lines handily surpassed analyst expectations, contributing to Tuesday's near-7% boost in stock price while the market at large was in free fall. The company brought in $2.64 per share, compared to only $0.23 the year before.

So investors recognized a good thing, and in a rare sign of optimism they may have even overreacted to the positive earnings report. While I am a big fan of Mayer and her efforts at the company, the company still has a long way to go to regain relevance in the shifting technology landscape.

Road ahead
Mayer correctly assessed that the company needs to make a material shift to mobile strategies. She forecasts that, in the near future, half of her programming team will be dedicated to mobile initiatives. The problem is, mobile is still in a disruptive stage, and the companies that often best address disruptive trends are start-ups. By being a large company, Yahoo! has a big challenge to not only address the shift to mobile, but to do so ahead of the curve and offer consumers something that competitors are not.

This is difficult, and beyond my ability to confidently assess. My faith is in Mayer, though, who displayed her skills at her former employer, Google (NAS: GOOG) . As anyone with access to the Internet knows, Google is far ahead of Yahoo! these days when it comes to search, ad technology, and self-driving car technology (the latter isn't quite as integral to a successful future, but it makes for great press). That's partly why it surprises me that, after the recent bump in stock price, you are paying nearly the same on a forward earnings basis for the two companies. One has a much more proven ability to navigate mobile waters, and the other is just coming around the "What happened?" bend.

I'll put my own cynicism aside for a moment though, because Marissa Mayer has done some great things for Yahoo!.

The mayor of Yahoo!
Marissa Mayer has started to build a new company within an aging tech company. Since coming into the office, she has brought in fresh talent from her former employer as well as start-up blood. She has promised radical transparency for investors, something we occasionally hear but don't often see. She has made Yahoo! a place people actually want to work at -- free food and smart phones -- putting it on the same playing field with, again, Google and start-ups.

Not totally abandoning the few things Yahoo! is known for, Mayer thinks its current strengths bode well for its shift to mobile. On the conference call, she posed that the most frequent uses of smartphones are for weather, stock quotes, sports scores, and the news. (I think email should be on that list, but oh well.) The point is, Yahoo! happens to be the go-to source for things like stock quotes and sports.

I'll say it again: it's a long, long road ahead of Yahoo! that will take years to show results. Don't think that this shiny earnings report means its troubles are over. The market is very happy, which is troubling, but its a nice surprise nonetheless. This is a company that still has much to prove, but I believe Mayer may be just the person for the job. In the meantime, if you hold the stock, enjoy this week's bounce and pat yourself on the back for not following Einhorn toward the exit.

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The article The First Few Steps to a New Yahoo! originally appeared on Fool.com.

Fool contributor Michael B. Lewis has no positions in the stocks mentioned above. The Motley Fool owns shares of Google. Motley Fool newsletter services recommend Google and Yahoo!. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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